Texas Instruments Stock Drops 3.19% Amid Layoffs, Market Weakness

On April 3, 2025, Texas Instruments' stock dropped 3.19% in pre-market trading.

Texas Instruments has announced layoffs following the receipt of a $1.61 billion chip subsidy. The company has dismissed some workers from its existing factory in Lehigh, as part of reforms aimed at "effectively supporting our long-term operational plans." The layoffs include positions at the Lehi factory located near the Timpanoagos Highway. The company did not disclose the number of employees affected, but stated that the figure is below the threshold for notification under the Worker Adjustment and Retraining Notification (WARN) Act. Federal law typically requires employers to provide 60 days' notice before large-scale layoffs, plant closures, or relocations.

The U.S. Department of Commerce had previously approved a $1.61 billion grant to Texas Instruments in December 2024 to expand chip production. The company has pledged to invest over $18 billion by 2029 in two new factories in Texas and one in Utah, creating an estimated 2,000 manufacturing jobs. The company will receive $900 million for its Texas operations and $700 million for its Utah operations. Despite assurances that the layoffs do not alter plans to remain in Utah and build a second factory, concerns persist about the sustained weakness in the market for analog chips.

Texas Instruments' recent performance has also fueled market concerns. The company's fourth-quarter results showed a decline in revenue and net income, with industrial and automotive end markets still struggling to recover from excess inventory. The company's revenue for the quarter was $4.01 billion, down approximately 2% year-over-year and 3% sequentially. Net income was $1.205 billion, down 12% year-over-year. By business segment, Q4 analog revenue grew 1.7% year-over-year to $3.17 billion, while embedded processing revenue fell 18% year-over-year to $613 million. Other segments saw revenue grow 7.3% year-over-year to $220 million. The broader electronics industry remains in a slump, with Texas Instruments' sales declining for the ninth consecutive quarter. Executives had previously indicated that some end markets were showing signs of recovering from excess inventory, but the rebound has been slower than some investors anticipated. The company also forecasted a further decline in sales for the first three months of 2025.